Cell Phone Insurance Vs Cell Phone Warranty
89No one seems to have questions about cell phone insurance but for me it's a hot topic. When people buy a phone they expect that it will last them a good long while. Especially old people that want a phone to work for ten years. And there's some people that have no idea what the difference from warranty to insurance is. Not distinguishing the difference can cost you hundreds of dollars.
When you buy a cell phone, there is no guarantee that it will last beyond one year. You may think: "but I signed a contract for two years," which often times is the case. But regardless of if your cell phone provider requires you to sign a one year contract or a two year contract, your phone is only guaranteed to work, should you take care of the phone, for a solid year. You must take good care of the device. Try not to drop it. Don't leave it in a glove compartment. Don't drop it in your toilet. Don't let your kids get their hands on it. Do anything you can to make sure that your phone is safe.
What people think is that they can walk into a store and just pick up a free phone because they did that when they first walked into the cell phone store and that's what they were able to do last time they upgraded. The price of the phone is FREE... or, at least, that's what they think.
As stated in my last post, the only phones that will ever be priced under $200 are prepaid phones. Any phone that you may have received from the cell phone store that's either free or possibly $35 tends to be $200 and above. You only get it for free or at the serious discount if you sign a contract. The store representatives may not tell you that, but it's not their job to mother you. That's your job.
Here's the distinction from warranty and cell phone insurance. Warranty is a guarantee that the phone will work AS IS. So long as the phone has been safe from any physical damage and is still in your possession it will cover any sort of manufacturers defect. The warranty lasts for one year. Calling into Customer Care and saying your phone was stolen and you're under warranty and thus you need a new phone sent to you is ridiculous. Warranty doesn't cover lost or stolen phones. It only covers manufacturer defects in the phone. If you received the phone and it always acted defective, then not only did you have a 14-30 day buyers remorse (depending on the cell phone company's policy) but you also had a one year warranty that you could have taken advantage of at any time. Again, you may be thinking: "But I wasn't told any of this." The funny thing is this information is stated not only in bold but it big capital letters on the contract if customer's would only bother to read it. It's obvious customers don't read contracts because they always cry and complain about these points when they call in. The cell phone company won't bend on this point because you signed a contract that said all this information was completely acceptable. And even if you didn't you have to accept the terms of use.
Insurance will cover anything above warranty. The deductibles usually cost from $50-150. Customer Care representatives will often times send you over to the warranty because it's a free exchange. Insurance functions just like any other insurance. You pay a monthly rate every month, and when you need to file a claim there's a deductible. That's why they call it phone insurance. It's insurance. In fact, when the cell phone company transfers you over to a department that will help you exchange your phone through insurance because you're out of warranty, your phone received water damage, or it was lost or stolen they're actually transferring you to an entirely different company that represents the cell phone provider.
There are customers that ask things like, "why do I have to pay a deductible because your phone wasn't durable enough to survive a wood chipper," the reason being is because the customer ruined their phone. It's not the cell phone company's fault and because it's INSURANCE.
Now... there is some information that you need to know about both warranty and insurance. When you need a replacement phone, there is a large chance that you may receive a refurbished phone. Some customers think this means nothing but trouble. What quite a bit of customers don't know is that what a refurbished device can mean as little as a phone was owned by a customer less than thirty days and the customer decided they didn't like the color and thus returned it. Or possibly a refurbished device can mean that a button stopped working on the phone and the phone has had all defective parts replaced and has been tested multiple times before being sent back onto the market again. This may instill confidence in refurbished phones and it also may not. I can understand the perspective either way.
With warranty and cell phone insurance, you will either get a like or similar phone as well. So if you're unhappy with the model of phone that you purchased and you keep getting replacements and you state that there must be some sort of defect, then you're still going to keep getting the same phone from warranty or insurance... unless, of course, the phone you hate so much is out of stock. Then you get a similar phone.
So here's the next bit of information that you might find interesting. The iphone doesn't qualify for phone insurance. There's a large black market for the iphone. Customers tend to find ways to cheat AT&T's system to get iphones for cheep and try to sell the phones at a profit by canceling their contracts. The iphone doesn't qualify for cell phone insurance because of that blackmarket. It's too easy for people to perform insurance fraud.
So if you find yourself owning an iphone and you didn't know this, you should have read the contracts. You had more of them to read and to sign than the conventional cell phone customer. What some people do is they get an extended warranty through apple care. This is expensive. Other customers get insurance on the iphone for $14 a month through BestBuy. This is expensive and I'd call it a complete waste of time.
There's another option for not only iphone customers but also for any consumer of wireless services. You can go into any place that provides insurance, usually places that offer insurance for a car. Then ask them about "Personal Line Insurance" and tell them that you're wanting to insure your phone. They may not know what that is and so you may need to give them a little bit of time to research the matter fully. You may need to get some shopping done and then come back to the Insurance Provider as soon as your tearing around is finished.
What they will tell you is that they will need the full retail price of the phone listed. Last time I checked with my insurance company, which is State Farm, just for kicks and giggles, they gave me an estimate of $4 every month for the 32GB iphone 3GS they told me that I'd have to pay a deductible around $150.
That's great, if I owned an iphone.
So here's the thing. Let's suppose I lost my iphone and I were to walk into my insurance company that's giving me personal line insurance. Even if the deductible were a little more, it would be worth it. The reason why is because there's nothing in personal line insurance that states that you need a refurbished device, nor that you will be required to get a like or similar phone.
When you pay the deductible, they'll give you the full price of the phone in cash. At that point you can buy whatever phone you'd like and either way, it'll be a brand new phone.
